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Analysis of Novartis AG v/s Union of India

Brief Facts of Case
Novartis, a Swiss pharmaceutical conglomerate, filed a patent application in 1997 for Glivec, an anticancer drug used to treat Chronic Myeloid Leukemia (CML) and Gastrointestinal Stromal Tumors (GIST), claiming that it invented the beta crystalline salt form (imatinib mesylate) of the free base, imatinib. It is a life-saving medicine that is patented in more than 35 countries worldwide.

However, India did not give patents to pharmaceutical and agrochemical products at the time. It was in the year 2005 in India when drug items were granted patent protection under the TRIPS agreement. As a result, India amended its patent law and began issuing patents on pharmaceutical products. In 2006, the Madras Patent Office denied Novartis' patent application for Glivec, claiming that the medicine did not show any significant differences in therapeutic effectiveness over its pre-existing form, which was already patented outside India.

The judgement was made under Section 3(d) of the Indian Patents (Amendment) Act, 2005, which states that a known chemical can only be patented in novel forms that have improved efficacy. The Patent Office is a government agency that issues patents. The Patent Office did not find any enhanced efficacy in the drug Glivec and, therefore, considered it incapable of patentable under Section 3(d) of 2005 Act.

Novartis filed two writ petitions in the High Court of Madras in May 2006, one appealing the order of the Madras Patent Office rejecting its patent request and the other contesting that Section 3(d) of the Indian Patents Act is not in compliance with TRIPS and is vague, arbitrary, and in violation of Article 14 of the Indian Constitution.

The Madras High Court dismissed Novartis' Writ Petitions, ruling that it lacked power to evaluate whether a domestic statute is in violation of an international treaty, and hence could not judge if Section 3(d) complies with TRIPS. As far as Section 3(d) is considered, the objective of the Amending Act was to prevent evergreening and to make easy the access to life-saving drugs to the citizens. Therefore, it cannot be considered to be vague and arbitrary.

The Intellectual Property Appellate Board, which is a patent controller's appellate body, kicked up the new phase of litigation. The beta-crystalline form of imatinib mesylate was deemed unique and creative by IPAB, but the drug of Novartis was denied a patent due to Section 3(d) of the Act. Novartis filed a Special Leave Petition with the Supreme Court in order to dispute the order.

NACTO pharma Ltd and M/S Cancer patients association

Two of the objectors, NATCO Pharma Ltd. and M/s Cancer Patients Aid Association, have also filed a Special Leave Petition challenging the IPAB's decision in Novartis AG's favour. All of these SLPs have been given leave to appeal, which means that all questions are available to this Court, and this Court can handle the case without regard to the Authority's or the Trial's findings.

On 20/7/2002, NATCO Pharma applied for an Indian patent on what is known as the A2 form of Imatinib Mesylate. Natco Pharma has again applied for a patent on novel crystalline forms I and II of Imatinib Mesylate and has also accepted that they exist in alpha and beta forms in NOVATIS Patent. Both parties challenging the application of Novartis themselves applied for the patenting of the crystalline forms of Imatinib Mesylate as novel inventions.

Arguments by petitioner
T.R Andhyarujina and Gopal Sbramanium, both senior attorneys for Novartis, led the Novartis team. The main issue before the court was whether the beta crystalline form of Imatinib Mesylate constitutes an innovation under section 2(j) and (j)(a), and if so, how does it affect section 3? (d). The appellant claimed that imatinib Mesylate in beta crystalline form is a brand-new product. Only Imatinib free base was previously recognized to exist as a prior art.

Novartis was the first to create the alpha and beta versions, which had previously been unknown. The beta form offers additional benefits than the free base, such as thermodynamic stability, which makes it a more effective medicine. This would be an example of the drug's industrial use.

Imatinib as a compound, which was published in the Zimmerman patent, was the prior art. As a result, there was a technological advancement over the prior Patent. No crystalline form of Imatinib Mesylate was anticipated or disclosed in the Zimmerman patent. In the Zimmermann patent, there was no method for converting Imatinib to Imatinib Mesylate that worked. It is merely concealed and not revealed. Furthermore, the parties opposing Novartis' application have filed for and received patents for crystalline versions of Imatinib Mesylate as a novel innovation. These data support the claim that the inventions are new.

Section 3(d) which was amended in 2005 is provision of what cannot be patented but the product otherwise is seen as an invention according to section 2(j) and (j)(a). the strategy of evergreening was discus by the parliament as a tactic to obtain a trifling measure in 2005.on the facts pleaded by Novartis, section 3(d) was not applicable to the patent as reasons stated below:
  1. Section 3(d) applies only to a single step discovery of a new form of substance. The claim made by Novartis was that the Imatinib free base which was a known substance had to undergo various technical procedures and hence it is not a single step form and has dual stages. Thus section 3(d) should not be considered.
  2. The word which does not result in enhancement of the known substance is made for the patentee for a mere trifling change to create a new form of a known substance. If there is an enhancement of the known substance, then it must be patentable.

    The known substance, in Novartis invention was Imatinib free base. The efficiency of the beta crystallin form is practical efficiency has anti-tumour property and not just a theoretical possibility and it should be known to public, which was not in case of Imatinib free base. It has an known efficiency and hence section 3(d) should not be applicable.

The creation of the beta crystalline form of imatinib mesylate from the free base of imatinib was thus the outcome of a technological breakthrough in comparison to previous knowledge and the creation of a novel material. In order to selectively prepare the beta crystalline form of imatinib mesylate, researchers required to identify and optimize process parameters.

Arguments by respondents

There were seven named respondents who were represented before the court along with two Intervenor/Amicus. Paras Kuhad, India's Additional Solicitor General, was in charge of the respondents. The argument was that all salts have qualities such as hygroscopicity, flow properties, and thermodynamic stability, and that these properties should be clear to a professional.

The beta form of Imatinib Mesylate was the first oral medication form nation to treat CML with Gleevec, and it was commercialised successfully. The respondent's reasoning was founded on hindsight bias betrayal.

The world did not have to wait for CML to be cured if hindsight bias was right. In light of prior art of knowledge, it was contended that the claimed invention was not expected nor novel. The petitioner's application to the United States Food and Drug Administration as an extension of the Zimmermann patent with respect to Glivec.

Various claims were presented to the court, but the main focus was on demonstrating that imatinib mesylate in beta crystalline form is neither new nor ambiguous, citing Cancer Research and Nature publications on imatinib mesylate in 1996, disclosures in Zimmerman patents, FDA disclosures, and finally, that efficacy as defined in section 3(d) should be interpreted as therapeutic efficacy. Bioavailabity is a property that gives an impact of efficiency of the drugs.

Efficiency must mean effectiveness as the only difference between a pure and impure form. Thus, inclusion of these forms within explanation implies that efficiency in strict sense would be therapeutic.

The issue of prior published article of Cancer Research article published on 1/1/1996 which was prior to the date of patent application which disclosed that the product can be synthesized. Thus, Imatinib Mesylate along with efficiency towards the treatment of tumours was already known before filing the patent. The expression ´┐Żeconomic significance´┐Ż cannot just mean profit to the inventor it also means the invention leads to significant reduction in costs or reduction of consumption of imported components. This invention did not have economic significance.

The respondents quoted extensively from the Doha Declaration, quotes from parliamentary debates, petitions from NGOs, WHO, etc to illustrate arguments on the public policy dimension in terms of simple affordability and life-saving drug availability.

Summary of judgment
In April 2013, the two-judge bench of Supreme Court of India rejected the appeal filed by Novartis and upheld that the beta crystalline form of Imatinib Mesylate is a new form of the known substance i.e., Imatinib Mesylate, wherein the efficacy was well known. Supreme Court made it crystal clear that in the case of medicine "Efficacy" in section-3(d) only means "Therapeutic Efficacy" and states that all properties of drug are not relevant, the properties which directly relate to efficacy in case of medicine is its therapeutic efficacy.

The Supreme Court also ruled that patent applicants must demonstrate an increase in therapeutic efficacy in animals based on in vivo research results. Under section-3(d) of the Patent Act of 1970, a 30% increase in bioavailability qualifies as an increase in therapeutic efficacy if evidence is supplied. The Supreme Court found that the underlying intent of Section 3(d) was to preclude the concept of evergreening, and that an invention that does not pass the Section 3(d) test will not be given a patent. The court went on to say that this decision should not be taken to suggest that all incremental inventions are prohibited by Section 3(d).

It is in the realm of medicine, particularly in the case of life-saving pharmaceuticals, that a great deal of care and caution must be exercised in order to defend the masses' right to life. The Supreme Court compared the efficacy of "Beta Crystalline form of Imatinib Mesylate" to "Imatinib Mesylate" based on its flow properties, better thermodynamic stability, and lower hygroscopicity, and concluded that none of these properties contribute to an increase in therapeutic efficacy under section-3(d) of the Patent Act, 1970, and Novartis has not provided any document demonstrating that the efficacy of "Beta Crystalline form

Thus, Supreme Court rejected the appeal filed by Novartis and concluded that since there was no substantive and conclusive material and evidence prove that beta crystalline for Imatinib Mesylate will produce an enhanced or superior therapeutic efficacy, therefore failed to meet the requirements under Sec 3(d).

Ratio decidendi

It was being very rightly said that the ever greening of the patents is not permitted. Furthermore, the court safeguards the rights of ordinary people and prohibits pharmaceutical firms from selling drugs at exorbitant prices that are out of reach for the average person. Companies cannot market identical pharmaceuticals by simply modifying the molecular structure of the material, according to Section 3(d) of the Patent Act. Imatinib Mesylate, on the other hand, lacks an "innovative step." As a result, perpetual greening of patents is prohibited.

The evergreening of patented drugs is restricted because once the drug gets patent license, no one has a right to manufacture such drug again. Only the patent owner owns the exclusive licence for such a medicine. This clause is in place to protect patents' originality. The patent holder has a one-of-a-kind licence to exploit his creation. No one else has the authority to utilize or abuse this right. The compulsory licencing provision is written in such a way that evergreening is prohibited.

Critical Analysis
The Novartis case, by bringing the pharmaceutical business into the purview of patent law, may set a significant precedent for access to medications. The Supreme Court of India's decision could serve as a precedent for how other developing countries interpret and execute the TRIPS Agreement in the future.

This case demonstrates how India is upholding its global intellectual property commitments while also ensuring that domestic demands are met by interpreting its legal duties in a way that is consistent with home preferences and needs. The decision prioritizes social justice over commercial interests while simultaneously benefiting India's local industries. This is the first time that an Indian law prohibiting drug patents has been enacted, with just minimal changes.

This is the first time an Indian law has been implemented to ban drug patents with only minimal modifications to an existing one. Patenting will henceforth be used to protect only truly unique and inventive drugs that have a real therapeutic impact. In the case of India, we are witnessing a sophisticated game that has resulted in a conflict between global trade commitments and domestic public health concerns. In this scenario, the latter has definitely taken primacy.

The Supreme Court's decision aims to prevent the ever-greening of patented items and to provide relief to individuals who cannot afford life-saving treatments since pharmaceutical corporations sell them at exorbitant prices, making them expensive to the average person.
  The Supreme Court stated in its decision that India is a developing country, and that access to affordable medications is critical for the lives of 1 billion people. If Section 3(d) fulfils its stated purpose of avoiding evergreening in the sense of patenting ineffective, small medicinal alterations, then it makes little or no impact in the availability of generic medications.

On the other hand, if Section 3(d) actually promotes earlier access to generic medicines, then it must do so by precluding the patenting of genuine innovations and free-riding on innovations incentivized by stronger patent regimes. Thus, even if the results have been consistent with India's underlying social welfare goals, the reasoning behind these decisions has been flawed.

Whether India wishes to interpret enhanced efficacy to require no more than inventive step and industrial application, to mean improved efficacy in a broad sense, or to mean therapeutic efficacy, depends on which legal and policy rationales it finds most appealing and legally sustainable going forward. One hopes that India succeeds in reconciling the Supreme Court's decision to choose with both the theoretical underpinnings and practical realities of pharmaceutical patenting and innovation in India.

This decision is widely praised since it prohibits the ever-greening of patented products, and Section-3(d) of the Patent Act of 1970 bans major pharma businesses, such as Novartis, from obtaining a second Patent simply by making minor improvements to pre-existing knowledge or technology. Despite the fact that section 3(d) is constitutional and has a noble goal of avoiding evergreening, it is a poorly drafted clause.

The main section and the explanation are incompatible when it comes to the patentability of a new form with a new use, for example. Section 3(d) has creases that need to be ironed out in order for it to work more "efficaciously" and to provide the law more certainty. This becomes even more pertinent, given that there are more cases at the patent office that hinge on section 3(d) and several countries that are seeking to emulate this unique statutory provision.

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